Dell continued to outpace the rest of the IT industry in
the company's third quarter with sizzling growth in shipments,
revenue, and net income adding up to the best quarter yet for the
hardware supplier.
Revenue was $12.5bn (£6.8bn) for the period ending 29 October,
an increase of 18% from last year's third quarter revenue of
$10.6bn. Net income was $846m, up 25% from $677m in the previous
year's third quarter.
Dell posted strong increases in shipments across the breadth of
its products. The company has set internal records for quarterly
revenue in three of the last four quarters. The only exception was
the traditionally slow first quarter of 2004, which nonetheless was
a Dell record for first-quarter revenue.
PC market watchers such as IDC and Gartner have warned that
consumer spending on PCs is headed for a slowdown, but Dell does
not expect any impact on its business, said president and chief
executive officer Kevin Rollins.
The company derives the majority of its revenue from businesses,
which increased their spending on Dell products by 25% in the
quarter, he said.
The company expects more of the same for the fourth quarter.
Revenue should be about $13.5bn.
Worldwide shipment growth in the quarter was 22%, propelled by a
35% increase in notebook shipments, Dell said.
A decline in component prices for flat-screen panels helped
drive the growth in notebook shipments, Rollins said. Component
prices fell in several categories, but the availability of cheaper
displays was great news for the notebook business, he said.
The company expects to sell five million printers this year,
making its printer business the most successful startup business
Dell has ever built, Rollins said.
Dell continues to grow strongly outside of the US, where it is
chasing Hewlett-Packard (HP) in PCs and servers. Overall shipments
to Europe, the Middle East, and Africa increased 31% in the
quarter, and shipments to Asia-Pacific and Japan were up 25%.
HP ships the most servers worldwide, but Dell believes it
narrowed that lead by two percent in the third quarter, it said.
Dell server shipments were up 19% compared with last year even
though the company struggled in the early part of the quarter with
some product transitions.
Rollins reiterated comments made earlier this week that while
Dell is impressed with Advanced Micro Devices's Opteron server
processor, it has no specific plans to break its exclusive
relationship with Intel at this time.
In the third quater, the company's headcount increased by 3,000
employees from the second quarter of this year and by almost 10,000
employees compared with the same period last year. Dell is bringing
more call centre employees in-house, as opposed to using
third-party companies to handle support calls, Rollins said.
Tom Krazit writes for IDG News Service
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